On 2 February 2012 The Qantas Group released details on its response to increased fuel costs and the Australian Government's Carbon Pricing Scheme. Then, on 30 March 2012 Qantas made further announcements about the continued increases in fuel prices.

Where available, Qantas Frequent Flyers may choose to pay these taxes, fees and carrier charges using points for domestic Australian and domestic New Zealand Classic Award flights. As a result of the above changes, the points required to pay taxes, fees and carrier charges for these flights will also increase.

These changes are summarised in the table below:

Points per segment for taxes, fees and carrier charges on Classic Award bookings

For bookings from

Australian Domestic

New Zealand Domestic

1 April 2012

4,850

4,850

1 June 2012

5,600

5,600

1 July 2012

6,000

5,600

These changes are further explained below;

The impact of increased fuel prices on domestic Australian and domestic New Zealand Classic Award flights

Jet fuel is Qantas' biggest operational cost and market prices remain consistently high. The Qantas Group's jet fuel cost for the six months to 31 December 2011 was $2.2 billion, an increase of around $450 million compared with the previous year. Average year to date jet fuel prices are at their highest level since 2007/08.

Therefore, for bookings made from 1 April 2012, the Qantas Points required when paying for taxes, fees and carrier charges on domestic Classic Award flights in Australia and New Zealand will increase from 4,500 to 4,850 points.

Then, from 1 June 2012 the Qantas points required when paying for taxes, fees and carrier charges on domestic Classic Award flights in Australia and New Zealand will increase from 4,850 to 5,600 points as a result of continued increases in fuel prices.

Note: the points required for surcharges, fees and taxes on domestic Classic Award flights in Australia will further increase for bookings made from 1 July 2012 as a result of carbon pricing. For more information, see below.

The impact of Australian Government's carbon Pricing Scheme on domestic Australian Classic Award flights

On 1 July 2012 the Australian Government's Carbon Pricing Scheme comes into effect with a starting price of $23 per tonne of carbon.

As first advised in July 2011, this will have an estimated cost impact on the Qantas Group of $110-115 million in 2012/13.

To recover this increase in costs, for bookings made after 1 July 2012, the Qantas points required when paying taxes, fees and carrier charges will increase from 5,600 to 6,000 points for all Australian domestic Classic Award flights.

Note, this increase in points required has been calculated based on averages for all domestic Australian Classic Award flights and historical data.